Drafting business capital contribution contracts in a Vietnamese company

A business capital contribution contract is a legal document signed between participating parties, in which one or more parties commit to contributing capital to a project or business for business purposes. This contract is a crucial legal document that clearly defines the rights and obligations of the parties involved in contributing capital to a company. Drafting this contract requires careful consideration and a deep understanding of business law. The article below will guide you in drafting business capital contribution contracts for the company.

Why is it necessary to sign a capital contribution contract in a company?

The capital contribution contract acts as an “agreement” between investors, clearly defining the rights and obligations of each party. Here are some reasons why it is necessary to sign a capital contribution contract in a company:

• The contract clearly defines the capital contribution rights and obligations of the participating parties, including contributed assets, contribution amounts, contribution deadlines, etc., to avoid disputes later on.
• The capital contribution contract helps to clearly and transparently stipulate all issues related to capital contribution, avoiding misunderstandings and disputes during the company’s operation.
• In case of a dispute, the capital contribution contract will serve as a legal basis for resolution, helping the parties find an appropriate solution.
• The capital contribution contract helps protect the interests of each member, ensuring that their interests are respected and not violated.
• A clear and transparent capital contribution contract will help build trust between members, creating a cooperative and efficient working environment.

Necessary contents in business capital contribution contract

To ensure transparency and avoid disputes, business capital contribution contracts should include the following contents:

Information of the parties in the contract

The parties in the contract can be individuals or legal entities. The information of the participating parties includes the name, address, and ID card/citizen identification number of the investors participating in the capital contribution. If it is a legal entity, complete business registration information is required.

Purpose of capital contribution

The purpose of capital contribution is very diverse, depending on the needs of the parties, as long as it does not violate the law. The parties can agree on contributing capital to establish a business, contribute capital to a real estate business, contribute capital to open a production workshop, etc.

Capital contribution amount and form

• Contributed assets can be Vietnamese Dong, freely convertible foreign currency, gold, land use rights value, intellectual property rights value, technology, technical know-how, and other assets that can be valued in Vietnamese Dong.
• Value of contributed capital assets: If contributing assets to the charter capital of a business, assets that are not Vietnamese Dong, freely convertible foreign currency, or gold must be valued by the members, founding shareholders, or a professional valuation organization and expressed in Vietnamese Dong. In other cases of capital contribution, the determination of the value of the asset must be based on the agreement between the parties entering into the contract.
• Time limit for capital contribution: a maximum of 90 days from the date of issuance of the business registration certificate.

Use of contributed capital

• The terms of use of contributed capital need to be agreed upon, such as whether ownership is transferred after using non-monetary assets for capital contribution, to whom it is transferred, and the scope of use of the contributed capital.
• Form and method of managing the contributed capital. The contributed capital may be held by a third party or by mutual agreement between the two parties. The two parties agree on the right to use and dispose of the contributed capital, the purpose of use, and the decision-making method.

Rights and obligations of the parties, profit and risk sharing in the business capital contribution contract

• Profit sharing is based on the capital contribution ratio, actual contribution, or separate agreement.
• Risk sharing is based on the capital contribution ratio or a separate agreement.

Dispute resolution method

• Determine how to resolve disputes arising during the implementation of the contract.
• Agree on the application of arbitration or court (if necessary).

Termination of the capital contribution contract

The capital contribution contract will terminate in the following cases: By agreement between the parties; when the contract term expires; in case one party violates the commitments, guarantees, or seriously violates the obligations under the contract, the remaining parties have the right to cancel or unilaterally terminate the contract or cancel and request the violating party to compensate for damages.

Signature and date of signing

Finally, ensure that all parties have read and understood the contents of the contract before signing. Each party needs to sign and date the signature to certify their consent.

Drafting business capital contribution contracts in a company

A clear, complete contract will help protect the interests of the parties involved and create a solid foundation for business operations. Below is the detailed process:

Step 1: Prepare necessary information

The parties provide complete information and documents regarding assets, finances, and the project they wish to collaborate on.

Step 2: Refer to contract templates

You can refer to the contract templates of Viet An Law.

Step 3: Review and edit the contract

Check the legality, ensuring the contract fully complies with current legal regulations. The content of the contract must be clear, coherent, and avoid causing misunderstandings, ensuring the rights of the members.

Step 4: Confirm and sign the contract

After the parties agree on the content of the contract, it is necessary to carry out the confirmation through notarization and certification to ensure legality.

Notes when drafting a business capital contribution contract

Drafting a business capital contribution contract requires attention to the following issues:

• Compliance with the provisions of law on investment, enterprises, contracts and related regulations.
• Specific and clear provisions on the rights and obligations of the parties.
• Ensure that the valuation of assets is accurate and reasonable to avoid damage during the cooperation process.
• Notarize and certify the contract to ensure the legitimate rights of the parties.

Above is the guide to drafting business capital contribution contracts in a company that Viet An Law provides to you. If you have any legal problems, please contact us for prompt support.